Here’s the Worst Time to Invest in an Index Fund

Is there ever a bad time to invest in an index fund, such as the Vanguard 500?

Believe it or not … there is a bad time to invest in index funds.

Here’s the truth.

Is there a bad time to invest in an index fund?

Yes.

There is only one bad time to invest in an index fund like the Vanguard 500.

Tomorrow.

Index funds are long-term investments, and the longer you take to invest in them, the lower your returns will be.

I mentioned this briefly when asked about the best investing options in May 2017; these investments are timeless — they’re just as good now as when they were first introduced in 1971.

Of course, if you started investing in them in 1971 … you’d have a lot more money right now 🙂

Index funds are not short-term investments.

The entire point of owning an entire index or industry is that you’re diversifying what you own and riding it for the long-term. Add in the fact that fees are so low, and you’re well on your way to outperforming any other investment options.

The problem for Seides is his five funds through the middle of this year have been only able to gain 2.2 percent a year since 2008, compared with more than 7 percent a year for the S&P 500 — a huge difference.

That means Seides’ $1 million hedge fund investments have only earned $220,000 in the same period that Buffett’s low-fee investment gained $854,000.